Third Way Says Congress Must Ensure Higher Ed Meets Need of Hard-Working Students

March 30, 2019 by Dan McCue

The public policy think tank Third Way has thrown its support behind the PROTECT Students Act, a bill introduced this week by Senators Maggie Hassan, D-N.H., and Dick Durbin, D-Ill., that seeks to hold colleges, for-profit schools, and other institutions accountable when they engage in deceptive and fraudulent practices.

Hassan, a member of the Senate Health, Education, Labor, and Pensions Committee, and Durbin, the Democratic Whip, introduced the legislation on March 26.

In doing so they explained they are greatly concerned about dishonest actors in higher education who are enriching themselves with federal taxpayer dollars while leaving tens of thousands of their students with credits or degrees of little value, few job prospects and huge amounts of debt.

At the same time, the senators said, they are greatly concerned with steps Education Secretary Betsy Devos has taken to roll back Obama-era reforms intended to prevent such predatory practices in the first place, and to respond to the repercussions when those practices are uncovered.

They cite the demises of Corinthian Colleges and ITT-Tech, two of the nation’s largest for-profit education chains, which both collapsed after federal regulators alleged they’d engaged in widespread fraud, deceptive marketing and lying to the government.

Despite these profile examples, the senators say DeVos has “consistently putting the interests of fraudulent, for-profit colleges ahead of students.”

According to Senator Durbin, “For-profit colleges enroll just 9 percent of all postsecondary students but account for 34 percent of all federal student loan defaults. Add to that widespread predatory practices and a unique propensity within higher education for massive precipitous collapses, and the for-profit college industry continues to represent a disproportionate risk to students and taxpayers.”

Senator Hassan agreed.

“For our students and veterans to receive the quality education that they deserve, we must ensure that they are protected from predatory practices that too often occur at for-profit colleges and other higher education institutions,” She said.

Among other things, their bill would improve coordination of federal oversight of for-profit colleges among multiple federal agencies and close a loophole in the Higher Education Act that some for-profit colleges have used to exploit Department of Defense and Department of Veterans Affairs’ tuition programs and collect taxpayer dollars they would not otherwise be entitled to.

In endorsing the legislation, Lanae Erickson, senior vice president for Social Policy and Politics for Third Way, a Washington-based public policy think tank, said her organization believes students and taxpayers “deserve a return on their investment in higher education.”

“Too many students who enroll in college never get the degree they seek, leaving them with debt but no degree to show for it,” Erickson said. “And predatory institutions rake in millions in federal student aid dollars and leave students worse off than they were when they enrolled.”

The PROTECT Students Act, she said, “would solidify protections for students and taxpayers, taking a big step in the right direction towards holding institutions and programs accountable for delivering on what they advertise.”

Third Way knows how challenging it can be to earn a college degree. After an exhaustive analysis of federal data published earlier this year, the think tank found that just 57 percent of students who start two- and four-year colleges graduate.

At the same time, Third Way said, students who take out loans to attend college but never finish are three times as likely to default, earn lower incomes throughout their lives, and have higher rates of unemployment.

As a result of these findings, the organization has called for a national effort to raise the college graduation rate to 84 percent, noting similar efforts have increased the high school graduation rates by 15 percent.

Among the key findings of the Third Way study was that in the graduation rate of just one class of students entering two- and four-year schools in the United States was raised to 84 percent, it would result in an increase of over 730,000 two-year degree holders and over 520,000 four-year degree holders.

The ripple effects of that would be an increase in annual wages for 730,000 additional two-year degree holders by an average of $4,849; an increase in annual wages for 520,000 additional four-year degree holders by an average of $19,034; reduce the number of people in poverty by 48,000; and over the course of those students’  lifetimes increase the amount of local, state, and federal tax revenue by more than $90 billion.

With these statistics in mind, Erickson said The PROTECT Students Act “would put in place some sorely needed guardrails to ensure that students aren’t defrauded and taxpayers aren’t left footing the bill when an institution fails to do its job.”

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